The net profit of a business is the difference between its gross, or total, profit and its total expenses, including overhead, interest payments and taxes. The net profit margin is the amount of profit a business receives for each unit of sales. After collecting all of the necessary information, businesses can calculate this number with a simple formula.

Total Revenue

In calculating net profit margin, a business first must know its total revenue. Total revenue is all money received for sale of products or services on the market. Using a spreadsheet or some other finance or budgeting tool, a business can calculate total revenue by multiplying the price of a product by total units sold and adding together the total revenues of all products.

Gross Profit

Gross profit, according to QFinance, is "difference between an organization's sales revenue and the cost of goods sold." For instance, if a store buys 100 units of a particular ballpoint pen for $2 each and sells them for $3.50 each, the store's gross profit is 100 ($3.50 minus 100 times $2, or $150.

Net Profit

Net profit is the actual amount of profit that a business generates after all expenses. Businesses figure net profit by taking gross profit and subtracting all expenses, such as overhead, interest payments and taxes. For instance, if a store has $50,000 in gross profits, but has to pay $5,000 for rent and utilities, $15,000 for labor, $2,000 in interest payments and $1,000 in taxes, its net profit is $50,000 minus $5,000 plus $15,000 plus $2,000 plus $1,000, or $27,000

Net Profit Margin

To calculate net profit margin, a business needs two figures: net profit and total revenue. The business must then divide net profit by total revenue and multiply this number by 100. The result is a percent. For instance, if a business has $150,000 of net profit and $350,000 of total revenue, the net profit margin would be $150,000 divided by $350,000 multiplied by 100, or 42.857 percent.

About the Author

Ronald Kimmons has been a professional writer and translator since 2006, with writings appearing in publications such as "Chinese Literature Today." He studied at Brigham Young University as an undergraduate, getting a Bachelor of Arts in English and a Bachelor of Arts in Chinese.